What is the difference between a broker-dealer and an investment adviser?

The main difference between a broker-dealer and an investment adviser is the way they are regulated. A broker-dealer is an individual or a firm that engages in the buying and selling of securities. They must register with the Financial Industry Regulatory Authority (FINRA) in order to conduct these activities. They are required to adhere to certain regulations as laid out in the Securities Exchange Act of 1934. An investment adviser is a firm or individual that is responsible for providing investment advice to their clients. Unlike a broker-dealer, investment advisers are regulated at the state level, usually by the state securities commission. In Florida, the Department of Financial Services regulates the investment advisory industry. Investment advisers are also required to obtain a license in order to operate in the state. The way that the two are regulated is different and can have a big impact on the way that they conduct business. Broker-dealers are focused on the buying and selling of securities, whereas investment advisers are focused on providing advice to their clients. Investment advisers are held to a higher standard than broker-dealers, as they must meet more stringent requirements in order to keep their licenses.

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What is the difference between a broker-dealer and an investment adviser?

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